How to Beat Car Dealers in Negotiating a Deal
Updated: Oct 21, 2022
You would notice that in movies, car dealers are mostly sleazy and has the tendency to take advantage of a customer. This is not necessarily right but not completely wrong either. Car dealers can really be a pain in the neck especially if you are unprepared. They are specifically trained to persuade people and they could immediately gauge your vulnerability and weak points and use these to their advantage to put you in a spot where you lose your focus to influence your decisions. After all, it is part of their job to get as much profit as they can in a deal.
Most people would have apprehensions when going through a car dealership. In fact, if you would ask Americans which they would prefer, a dentist or a car dealer? A lot, if not all would probably prefer the dentist. This is so since salespeople can sometimes be a bit intimidating with their high-pressure sales tactics. Consumers on the other hand can feel pressured to decide on the spot because of the lack of time and flexibility to return to the dealership anytime (Amazingly, the average time in a car dealership can reach up to 4 hours). And to add up the overwhelming feeling of excitement of buying a car and the doubts that we are paying a fair price for our purchase — too much to handle indeed! These things alone can affect our choices and the way we negotiate for car prices given the fact that we are amateurs in this field against a group of pros who probably spend most of their time honing their skills.
So, when you want to drive your new car with still some money on your pockets, then keep in mind these car negotiation tips. Below are 13 car dealer tricks you may want to consider:
1. Start with emails and phone calls
“Email several dealers to ask for their best price for new and used cars. If they say you need to come in, tell them you will—only if they give you a great price in writing. Even if you think you’ve found ‘the one,’ you can save money by comparing the price for similar vehicles offered by other dealers. If a dealership doesn’t respond, take your business elsewhere.”—Sonia Steinway, President, Outside Financial
The advantage of emails is that it allows you to control the situation by having car dealers compete against each other, instead of competing with you. Negotiating by email can be done from the comfort of your computer, tablet, or smartphone. This keeps you from driving from dealer to dealer spending hours haggling over price.
2. Keep your trade-in to yourself
“Dealers like to move money around to confuse car buyers about how much they are really getting in the deal. If you mention you want to trade in a car up front, you are opening the door to a shell game. The salesperson will focus on what you want to get for your trade and may artificially inflate the ‘trade allowance’ to get you to say yes. This leaves no room to negotiate on the price of the new car. Furthermore, the salesperson may ask to appraise your trade, taking your keys and literally holding your car hostage until you agree to a deal.”—LeeAnn Shattuck, The Car Chick
Insist on negotiating one thing at a time. Your first priority is to settle on the lowest price you can get on the new vehicle. Only after you’ve locked that in should you begin to discuss a trade-in or financing.
And if you think the dealer’s trade-in price may be unfair, you may want to consider selling your car on your own.
3. Don’t try to haggle
“Salespeople spend their days selling. Chances are you won’t be as good at getting them to give you a great deal as they are at getting you to buy. So focus on what you can do: Force dealers to compete against each other by sending you their best offers.” —Sonia Steinway.
4. Be wary of “fun” advertisements
“If you received a mailer with a ‘scratch off to win’ game on it—avoid it at all costs! These dealers prey on the desperate, offering lower payments but dragging the terms out. This ensures the value of the car will always be less than you know.” —Travis Johnson, author of The Comprehensive Car Buying Guide.
5. Talk sale price before mentioning leasing
“If you say ‘I’m thinking about leasing,’ it is the same as telling the dealer that you are a monthly payment buyer. The salesperson will focus on the lease terms to get you to the monthly payment you want instead of negotiating the price of the car. Negotiate the price of the car first, then negotiate the lease terms.” —LeeAnn Shattuck.
6. Time your shopping
“If possible, wait until the end of summer. With the holidays coming up, dealerships need to make room for new vehicles and lower prices on older models accordingly. You can also expect more competitive financing offers like zero per cent interest for qualified buyers. Such deals will trickle through the following months, so keep looking out for discounts through October to December. Just don’t get talked into buying the latest model for more.” — Andrea Woroch, consumer and money-saving expert.
7. …Or wait until the end of any month
“Most dealers need to meet monthly sales quotas, so they may be willing to give you a better deal if you shop at the end of the month. You’ll also get more personalized attention if you shop on weekdays when there aren’t as many other shoppers in the store. And no matter where you go, make sure you’re well-fed and well-rested to avoid making impulsive decisions.” —Sonia Steinway
At the beginning of the month, car dealers are mostly focused on the profit and commissions they get from the sale. By month-end, some may already feel anxious to meet monthly sales targets which could give you the upper-hand when negotiating a car price.
8. Know the difference between price and payments
“The most common trick dealers employ to attempt to charge a higher selling price is to negotiate based on payment rather than price. First, the payment is the primary budgetary concern for most buyers, so it is normally easy to shift the buyer’s focus to it. Raising the monthly payment by only $20 typically raises the purchase price by about $1,000. None of these practices is necessarily a bad thing, but they open the door for potential abuse if the buyer is unaware.” —Rob Drury, Executive Director, Association of Christian Financial Advisors.
Car Negotiation can be tricky. Focus on the vehicle’s final price rather than the monthly payments. Know when to keep info in your pockets when you here the question “how much are you willing to spend per month?”
9. Don’t shop at only one place
“Shop around at a variety of dealerships, whether it is the same brand or a totally different one. This will allow you to look at different cars and check out their different rebates/offers. You can also have your car appraised at different dealerships to see who offers you the most for your trade-in.” —Natasha Rachel Smith, personal finance expert.
10. Know what you can afford before you walk in the door
“The generally accepted rule is that you spend no more than 15 per cent of your pre-tax income on your monthly car note.” —Valerie Coleman, National Sales Director, 5miles.
11. Know the value of extras
“Buy your protection products outside the dealership for the highest quality, maximum flexibility and lowest pricing. And don’t waste money on products like fabric protection or VIN etching—a can of stain repellent and a $30 DIY etching kit work just as well, and don’t cost hundreds of dollars.” —Sonia Steinway.
12. Beware of extended warranties
“Dealers purchase these from the manufacturer and then jack up the price when selling to you. Anything over $300 is just straight cash in their pockets. Negotiate their price or buy directly from the manufacturer.” —Travis Johnson.
13. Don’t go it alone
“If you’re online car shopping, make sure to meet the seller in a public place and bring along a friend or family member to always be safe.” —Valerie Coleman
So there you have it – the basics on how to negotiate a car deal and to beat new or used car dealers at their own game too. As much as it is stressful and overwhelming, it can be exciting as long as you know what you want and did your part on the research. Remember that the fixed your decision is, the less likely you will be coaxed into buying a car that will not work for you or is not within you’re your budget.
Buying a car can be considered a big decision in your lifetime particularly because it involves a lot of money. One mistake could cost you a lot. Decisions such as buying a used car or a new one can be mind-boggling too. When you are torn apart with this, consider your needs and priorities. If you are more inclined to the latest technology over price, then buying a new car would be better for you. But if you are more concerned with price, then buying a used car is your option. There is certainly a huge price difference between a new vehicle and how much a used car is. However, new cars always come with a warranty, used cars on the other hand may require you to set aside a bit to cover for any repairs over time.
But whether you negotiate a new car price or a used one, always set the ground rules and let the sales person know that:
You have carefully researched the vehicle you want and have already taken a test drive.
You know exactly which trim level and options you want, have researched the price for that configuration, and know approximately what the dealership paid for it.
You have already calculated what you are prepared to pay. Reassure the salesperson that your offer includes a fair profit.
If the salesperson can meet your target price, you’ll be ready to buy immediately; if not, you intend to visit other dealerships.
The key is to have lots of preparation and research then you can drive your ideal car before you know it.